RBI: Indian banks' NPAs at 1.8% in March 2026
Indian banks are in a good spot right now.
According to the Reserve Bank of India's (RBI) latest report, bad loans (nonperforming assets, NPAs) dropped to just 1.8% in March 2026, the lowest in decades.
This means banks have stayed strong even with global drama like high energy prices and geopolitical tensions.
The RBI credits this to better capital reserves, more cash on hand, and smarter lending.
Looking ahead, NPAs might tick up slightly to 1.9% by 2028, but things still look steady.
Banks face pricier funding, AI attacks
Banks do have some new challenges: funding is getting pricier as people chase higher returns in mutual funds instead of savings accounts, so banks are relying more on term deposits.
Plus, AI-powered cyberattacks are now a real threat for banking security.
On the bright side, the interim peace deal between Iran and the US could help smooth out supply chain issues and boost growth.
While inflation is still a worry thanks to expensive oil and weak monsoons from El Nino, India's strong economy and financial safety nets mean banks remain a solid backbone for the country's stability.